Papermaster's role will be filled by Bob Mansfield, senior vice president of Macintosh hardware engineering, Dowling said.

Frenzy for iPhone 4 Sweeps World

Apple hired Papermaster in January 2009 to lead development on the new iPhone. He spent 25 years at IBM before he went to Apple. IBM sued him, saying a non compete agreement kept him from joining Apple. The case went to court and was settled after Papermaster testified he didn't have any trade secrets.

The reception problems on the iPhone 4 have been widely-reported and Apple has given a fix in the form of a rubber wrapper around the edge on the iPhone.

Some tech watchers noted Papermaster's absence at a press conference Apple held in the wake of the tech glich.